Are these sales or leases? Look like leases with the larger acreage getting bigger bonuses per acre. Good info.
Thanks, Martha. Of course you are right.
@Sylvester_W_Brock_Jr Sale of minerals that have been previously leased.
Oops. Looked at it wrong. Couple of small acreages in th middle. Still, good to know. I presume the disparity comes from different expectations of ultimate production, not just acreage involved. JimB
@Sylvester_W_Brock_Jr that sounds about right. There is a new well about to go into production in section 12-6N-7W. In section 22-6N-7W they have just begun drilling that well. A lot of leasing going on in sections 2-9N-8W and also 12-6N-8W. Not sure if any applications have been filed yet.
Thanks, Don. Interesting. Jim B
@Sylvester_W_Brock_Jr one more section where there is a soon to be 10 year old horizontal well. Room for more wells, I guess.
| Month | Section | Township | Range | Consideration Amount | NMA | Price Per Acre | Royalty Amount |
|---|---|---|---|---|---|---|---|
| July, 2022 | 16 | 4N | 5W | $85,000 | 5.00 | $17,000 | 3/16 |
Thanks, Don. Oil is still a valuable commodity, amirite?
1 Like
Roberts 0607 12-1-1MXH - Section 13-6N-7W
Is this a Hydraulic Completion Unit or Snubbing Unit or something else?
1 Like
Looks like a snubbing unit to me. Perhaps too much surface pressure as the Monty had until apache caved it in. Yet one more high $ expense to think about for those who choose a working interest.
1 Like
[This is a reply to a posting by Martha on Jul 19. I made a mistake in posting this reply, and just discovered that it never appeared in the forum.]
Wow, that’s very useful information. I’ll bet I’m not the only one who had no idea about most of that.
Thanks, Martha.
I do have three questions, though. I almost never have this situation, but if your holding is a substantial proportion of the total (e.g., 40 out of 80 acres for an oil well, less likely for a gas well), wouldn’t waiting for pooling be self-defeating, as it might just have the effect of preventing the pooling? (I’m not actually sure what percentage of the covered acreage has to be under lease in order to allow the pooling.)
Second, I’ve seen a couple of examples now in which I feel the producer has effectively avoided our clause limiting post-production charges by entering an agreement with a refiner to build those charges into the net payment to the producer, thus pretending/contending that they’re not prohibited by the post-production clause. Do you have a defense against this practice? Does “at the wellhead” really cover it?
If you’re willing to provide this information, what additional clauses in your Exhibit A do you regard as deal-breakers, rejection of which would cause you to wait for pooling? My list has been this: post-production, Pugh, depth, indemnification for damages done by producer. I also have, but wouldn’t put in the same deal-breaker category: definition of drilling commencement, limitation on term of shut-in, no warranty (though I physically strike the warranty phrase by hand, anyway), winner of any necessary litigation gets attorney and court costs covered, explicit statement that discovery that leased acreage is wrong results in additional payment or refund of portion of bonus, as appropriate, favored nation (which has actually been accepted three times now). And a few rather idiosyncratic clauses.
I’m going to follow your example and have our attorney review our now fairly old Exhibit A, BTW. 
Rudy
1 Like
1- If I remember correctly, anyone with one acre could actually pool. But your question really is about the percentage needed to pool. With 95% of the current drilling being horizontals, then ~640 acres is more the norm and 40 acres isn’t “that much”. If they want to drill the well, they will move ahead with pooling.
2-ask your attorney about this one.
3-those are good one, My deal breakers are post production charges, depth clause, limits on shut in, no use of oil, gas or water, commencement of drilling, no warranty, no top lease, no force majeur.
1 Like
We received the Continental solicitation two months ago. It was with a revenue check.
1 Like
Thanks, Martha. As always, I appreciate the information you provide here.
[quote=“M_Barnes, post:626, topic:28851”] Since two companies want to drill, it is highly likely that this is a good area.[/quote] We’re being inundated with offers from landmen. Is it possible to get a slightly better deal by negotiating directly with the two competing drillers? What’s the top royalty one might reasonably expect by forgoing any bonus? Is 1/4% an insane ask? TIA
What section, township and range? I am not seeing many 1/4 offers this year. Highly location dependent. Never hurts to ask.
Your choice is negotiate with either one or a third party and choose the best lease terms or wait for pooling (which I prefer in many cases). I would strongly advise getting an oil and gas attorney to look at any draft lease because they are not usually in the mineral owner’s favor and need edits.
Camino received approval for Sec 10-07N-07W et al in 2019 but cancelled them. Any reports or rumors of new activity in this area?
Bob Teeter
Don, regarding the mineral deed sales you listed, did these locations have producing wells on them?
31-9N-7W and 6-8N-7W. Two drillers competing:
Proposal #1: CAMINO NATURAL RESOURCES: Louise Fluke 0807 6-31-1MXH. Est. TVD: 13,465. TMD: 23,373 Est. SHL: SE/4 - SE/4 of 6-8N-7W Est. First Perf: 165’ FSL -330’ FEL of 6-8N-7W Est. Last Perf: 165’ FSL -330’ FEL of 31-9N-7W Target Formation: Mississippian (and any other potentially productive formations encountered).
Proposal #2: CITIZEN ENERGY: Lana 1H-6-31. Est TVD: 14,200.’ TMD: 24,200.’
Many thanks
There are plenty of companies that will pay good bonus money and 1/4th royalty. You just have to be patient. Most want to know there is going to be a well drilled before offering making offers. Operators always want to pay the least amount of bonus & least amount of royalty. Who can blame them. The recent 20-30% drop in oil prices will have an immediate impact on bonus money for sure. It’s all about competition and there is always more competition when the commodity prices are higher.
1 Like